Brands these days compete beyond product offerings, building distinctive competitive advantages to carve a niche for themselves. Common practices comprise technological innovation and product customisation, which genuinely share the same goal:
for a better customer experience!
While you can outsource a majority of business activities, nothing beats serving your customers directly in terms of flexibility and reliability.
After all, the idea of Direct-to-Consumer (DTC) has emerged and taken the way eCommerce business operates by storm - potentially left you wondering why.
The statistics below are concrete pieces of evidence:
55% of consumers prefer to buy directly from brands rather than multi-brand retailers.
More than 50% of consumers opt to visit brand websites (rather than retailer websites) because they offer more comprehensive information and guides.
Almost half (48%) of US consumers aged 13 and older buy direct (DTC) brands.
This transformation observed from consumer behaviours and tendencies is as if telling every eCommerce retailer:
’You should rethink your business model RIGHT NOW’
What is a Direct-to-Consumer (DTC) business model?
Getting everyone on the same page - A DTC business model refers to managing the end-to-end process between the retailer and the consumer. In this regard, a DTC company is fully responsible for all business activities, bypassing manufacturers, wholesalers, distributors and third-party retailers.
What to expect with a DTC strategy?
Through a DTC business model, you are likely to be benefited from:
- Enhanced customer experience
Selling through wholesalers, distributors or third-party retailers grant you little control over how your products are presented and sold. This can have a huge impact on customer perception and purchasing decision and vice versa, thus highlighting the prominence of a DTC business model.
- Strengthened brand-customer relationships
Another benefit of a DTC model lies in customer relationship management. When you get to serve your customers directly, it’s a great opportunity to build and strengthen relationships with them.
- Higher margins
Simple and straightforward - without the markups from third-party retailers, without business partners who take a proportion of profits away from you, you get what you get!
Yet ‘the greater the return, the higher the risk’ applies - be considerate in this strategy game!
What to consider in a DTC business model?
While DTC sounds ideal, you must face and overcome the harsh reality - managing almost every aspect of the consumer journey from selling, marketing to order fulfillment.
How you sell hugely matters. Consider the many touchpoints a consumer gets to know your brand and what you offer - then approach them strategically and correspondingly.
The design of your eCommerce site is critical. Read our blog for tips regarding shopping cart design and software: https://bonuship.com/en/blog/crowdfunding-fulfillment/best-ecommerce-shopping-cart-software-your-ecommerce-platform-free-comparison-analysis
Your eCommerce business can hardly grow without a strategic marketing plan.
Marketing is multi-functional, which serves to project a designated brand image, amplify how good your products and services are, and turn your offerings into solutions that address customers’ needs, etc.
From your eCommerce site, search engine to social media and more, you should utilize different channels to have your business be seen and be heard!
Get some SEO-related inspirations from our blogs!
About Google Merchant Centre: https://bonuship.com/en/blog/digital-marketing/hey-google-find-me-some-customers-handy-guide-google-merchant-center
- Order Fulfillment
Work (and hassles) begin from the moment a consumer places an order to the moment the order arrives at his or her doorstep. An order fulfillment process can be complicated and challenging, especially for small merchants.
Find top-notch secrets that help you ship like a pro: https://bonuship.com/en/blog/crowdfunding-fulfillment/8-international-shippers-secrets-you-need-know-and-they-wont-tell-you
Or simply go for our all-rounded eCommerce order fulfillment solution!
What are the potential challenges in implementing a DTC business model?
1. You may have to pay more to find new customers.
The costs required for customer acquisition may increase without the help of third parties, but don’t be freaked out - this is more of a short-term pain leading to a long-term gain.
2. Customers may have higher expectation towards their shopping experience.
Customer expectations only get higher along with the fierce competition. This is a one-way street that we can hardly deny.
Make changes today for future success!
A DTC business model takes time to build and succeed - but it makes a world of difference to your customers.